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PHILIP MORRIS INC. v. PITTSBURGH PENGUINS

October 31, 1983

PHILIP MORRIS INCORPORATED, Plaintiff,
v.
PITTSBURGH PENGUINS, INC. and CIVIC ARENA CORPORATION, American Sign and Indicator Corporation, Defendants



The opinion of the court was delivered by: COHILL

 I. Procedural Background

 This case comes before us on a complaint seeking, inter alia, a preliminary injunction, restraining and enjoining the Pittsburgh Penguins, Inc. ("Penguins") and the Civic Arena Corporation ("CAC") from interfering with a contract for advertising at the Civic Arena ("Arena") entered into by the plaintiff, Philip Morris Incorporated ("Philip Morris"), and the Penguins, and from interfering with advertising sold or rented to the plaintiff under the aforementioned contract.

 An amended complaint was filed by the plaintiff in which American Sign & Indicator Corporation ("AS&I") was joined as a defendant. In this complaint, the plaintiff seeks to restrain and enjoin AS&I from interfering with and conspiring to interfere with plaintiff's rights under the advertising contract.

 Subsequent to filing the amended complaint, defendants' counsel sent a letter to plaintiff's counsel, informing them of CAC's intent to install a new scoreboard in the Arena and to replace plaintiff's scoreboard advertising display with the advertisement of another tobacco company. In light of this letter, on September 9, 1983, plaintiff sought a Temporary Restraining Order ("TRO") to enjoin the defendants from altering any of plaintiff's displays at the Arena or installing any new advertisements without plaintiff's approval until this Court rendered a decision as to the complaint. The request was granted.

 On October 11, 1983, we conducted a hearing on plaintiff's complaint and Motion for a Preliminary Injunction. At the hearing, defendants objected to equitable relief in the form of an injunction on the grounds that the complaint sounded in contract law and, as such, any possible damages could be measured and enforced in law. Thus, the plaintiff would not be irreparably harmed. We disagreed and held that, if the defendants were to remove and replace any of the plaintiff's advertising displays before this case was adjudicated, irreparable harm would occur. We held that there is no way that monetary damages could be calculated for the loss of prospective customers due to the absence of the plaintiff's signs on the top panels of the scoreboard. As such, we proceeded in equity and conducted a hearing on the Motion for Preliminary Injunction. Pursuant to Fed. R. Civ. P. 65 (a)(2), we consolidated the hearing on the motion with a trial on the merits. At the conclusion of the hearing, we continued the TRO until our opinion was filed.

 In accordance with Fed. R. Civ. P. 65(d), we make the following findings:

 Plaintiff, Philip Morris Incorporated is a Virginia corporation. Its primary business is manufacturing tobacco products, including such brands of cigarettes as Marlboro, Virginia Slims and Benson & Hedges.

 Defendant, Pittsburgh Penguins, Inc., is a Pennsylvania corporation owned by the Edward J. DeBartolo Corporation ("DeBartolo Corporation"). *fn1" The Penguins is a National Hockey League team.

 Defendant, Civic Arena Corporation, is also a Pennsylvania corporation owned by the DeBartolo Corporation. CAC was formed in 1981 for the purpose of taking over the operational control of the Arena from the Public Auditorium Authority of Pittsburgh and Allegheny County ("Authority"). The Arena is a large circular facility located in downtown Pittsburgh in which sports events, concerts, conventions and other public activities are held.

 Defendant, American Sign & Indicator Corporation, was formed under the laws of the State of Washington. Its business is to manufacture advertising displays, scoreboards and other signs.

 II. Findings of Fact

 A. Advertising Agreement (Authority-Penguins)

 On June 1, 1971, the Authority, which at that time both owned and operated the Arena, entered into a ten-year lease with the Pittsburgh Penguins Partnership, allowing the hockey games to be played at the Arena. The lease specifically forbade the Penguins Partners ...


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